New polling by market research company Opinium has found clients of independent financial advisers (IFAs) are reporting significant concerns that are leading to changes in financial behaviour ahead of the upcoming budget.
A quarter of the IFA’s polled (26%) said clients are selling private rental properties ahead of the budget, 77% said clients are worried about potential changes to pension tax relief, and two thirds are concerned about a wealth tax. More than half (58%) of the IFAs surveyed reported their clients have made withdrawals from pension lump sums due to speculation about changes to pension tax relief, with one in ten (11%) saying budget speculation has led to some clients making plans to delay their retirement.
Over half (54%) of IFAs also say their clients have raised concerns around the possible introduction of capital gains tax (CGT) on sales of primary residences, with a similar number reporting client concerns around making private rental income subject to National Insurance (55%) and increasing the basic rate of income tax (53%).
Nearly one in five (18%) said their clients have delayed transactions, such as house purchases, amid concerns surrounding rumoured new property taxes. A similar proportion (17%) report clients increasing their cash holdings.
A quarter (24%) said clients have brought forward disposals, with 22% saying their clients have been crystallising unrealised gains or losses as uncertainty mounts around potential changes to the tax system. Around a tenth (9%) of respondents said clients had moved assets offshore or abroad due to budget concerns.
‘Our research highlights the degree to which budget speculation is already influencing financial behaviour’, said Opinimum CEO James Endersby.
“With rumours of major tax changes growing, many IFAs are seeing clients act pre-emptively, from drawing down pension lump sums to offloading rental properties. This level of activity underscores the deep uncertainty about what the chancellor may announce in the budget. While we don’t yet know how much of the speculation will be borne out, the impact is already being felt in people’s financial behaviour.”
